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Poland To Expand Special Economic Zone System

by Ulrika Lomas, Tax-News.com, Brussels

12 September 2017


The Polish Government has announced plans to effectively extend the scope of its Special Economic Zones (SEZ) regime nationwide in an attempt to boost investment.

Presently, there are 14 SEZs in Poland. These offer companies a partial exemption from corporate income tax depending on the size of the investment or the number of jobs created. In addition, SEZ companies may also take advantage of exemption from real estate tax. These incentives are set to expire in 2026.

Current law stipulates that companies must apply for a permit to operate in an SEZ and enjoy these tax breaks. Under a proposed overhaul of the SEZ permit system announced recently by the Ministry of Development, a company would be able to apply for similar tax exemptions irrespective of the location of their investment in Poland.

However, the qualifying criteria would be more comprehensive under the proposed law, with company size, the location of the investment, the type of investment, the local unemployment rate, and the quality of the new jobs created, among other factors, to be taken into consideration.

Announcing the proposed measure, Mateusz Morawiecki, Deputy Prime Minister and Minister of Finance and Development, said that tax incentives would be granted to investors on the basis of an administration decision.

"What we are proposing today is not a minor correction, [but] a real pro-development breakthrough in Poland's current economic policy," he said. "Each municipality, regardless of size and character, each kilometer from over 312,000 square kilometers of Poland, can become an attractive investment zone."

It is intended that no new SEZ permits will be issued after the proposed law becomes effective. However, permits issued prior to this date would remain valid until 2026.

TAGS: Finance | tax | investment | tax incentives | law | unemployment | Poland | tax breaks

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"Presently, there are 14 SEZs in Poland. Each of these include multiple sub-zones in all regions of Poland. SEZs cover over 20,000 ha of investment sites and offer companies (among other incentives) regional aid in form of full exemption from corporate income tax. The maximum intensity of the regional investment aid is calculated as the ratio of the equivalent of a gross subsidy and the costs qualified to be covered by this aid"

Please refer to the Regulation of the Council of Ministers of 10 December 2008 on the state aid granted to entrepreneurs operating under a permit to pursue economic activity in special economic zones.

Jarek on Wednesday, September 13, 2017

 






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